How to stay invested in U.S. stocks without the tech overweight + MORE Feb 19th

Canadian investors can get burned if they frequently convert their Canadian dollars to U.S. dollars in their investment accounts, because brokerages sometimes charge over 2% of the transaction to fulfill the request. The cost is somewhat hidden, in that brokerages typically use a foreign exchange rate that’s slightly higher than the “spot rate” you see when you look up the current exchange rate. However, a technique known as Norbert’s Gambit can help investors avoid some of those currency conversion fees.

What is Norbert’s Gambit?

Norbert Schlenker, the president of Libra Investment Management, reportedly came up with the idea for Norbert’s Gambit nearly 40 years ago. The concept became more prevalent over the past 20 years.

Schlenker used his idea to convert currency between Canadian and U.S. dollars using inter-listed stocks. For example, some Canadian stocks listed on the Toronto Stock Exchange (TSX) are also listed in U.S. dollars on the New York Stock Exchange (NYSE)…

Big Tech CEOs, like Jeff Bezos, Elon Musk, Mark Zuckerberg and Sundar Pichai were front and centre at Donald Trump’s inauguration—a sign of their growing influence in the years to come. Today, their dominance is just as evident in the stock market, particularly for investors who own U.S. equities through popular benchmarks like the S&P 500 and Nasdaq-100 Index. And for some Canadian investors, this heavy tech weighting is a concern. While the sector has driven much of the market’s gains, it also introduces concentration risk, meaning a downturn in tech could drag down a large portion of the index.

So, if you’re worried about being overexposed to U.S. tech, what are your options? Should you even try to reduce that exposure, or does it make sense to just ride the trend? Well, various asset managers have considered these concerns and introduced some exchange-traded fund (ETF) options designed to mitigate concentration risk. Here’s a look at the arguments for and against tech-heavy investing, along with some ETF alternatives that provide a more balanced approach to U…